Sturgeon Bay City Council overrides mayor to settle with hotel developer Bob Papke

A judge placed on injunction on Parcel 92 to prevent any development of the land until the determination of the ordinary high water mark. Parcel 92 was included in the site for the planned hotel development.(Photo: Courtesy of the Friends of the Sturgeon Bay Public Waterfront)

STURGEON BAY - The Sturgeon Bay City Council voted 5-2 to override the mayor's veto to complete a settlement with a hotel developer who had sued the city.

Mayor Thad Birmingham said he opposed the settlement because lawyers for both the city and the city's insurer had advised against it.

Bob Papke sued the city in 2017 claiming that city officials mislead him about the west side redevelopment project, which included a hotel, and he was owed more than $500,000.

The council voted 5-2 on Dec. 4 to approve a settlement with Papke, but Birmingham vetoed the action. The council needed a two-thirds majority, or at least five votes, to override Birmingham's veto Tuesday night.

Aldermen David Ward and Seth Wiederanders voted Dec. 4 to not approve the settlement and returned Tuesday night to vote, again, not to approve the out-of-court agreement.

The terms of the settlement include a $360,000 payment to Papke and a resolution by the council acknowledging Papke had been approached by the city to develop the hotel and that he negotiated the settlement in good faith.

"I don't think it's a wise thing to settle this claim when we have a strong case and the state statute is in our favor in terms of limits of damages," Ward said.

Without a settlement the lawsuit is likely to take two or more years leaving the west side waterfront property undeveloped and not contributing to the tax base, said Alderwoman Laurel Hauser.

"The risk for the city isn't in the amount of money that might be awarded compared to the amount we are setteling on," Hauser said. "The risk is the amount of time this land sits empty with nothing happening. And people are ready for us to move forward and for something to happen on this property."

While a state statute caps damages levied against a city at $50,000, Papke had multiple claims and one didn't have a cap. If the case continued in court and Papke prevailed, the cost to the city would be much higher, said Alderwoman Kelly Catarozoli.

"Because of this development agreement , literally the entire development of the waterfront has been hijacked, there is nothing we could plan there, not a path, a park or a sidewalk that wouldn't have weakened our position in this court case," Catarozoli said.

"We have a community that is ready to move forward and we literally could not move forward with any piece of that property," she said.

After the council meeting, a news release was issued by Papke thanking the city for the resolution.

"It is now time to turn the page and move on," Papke said.

The council also voted to approve hiring a consulting firm to develop plans to survey the community and conduct listening sessions to gather feedback for redevelopment of the west side waterfront.

Also the next meeting of the council will include discussion about an advisory referendum legalizing medical and recreational use of marijuana in the city.